The Art of the Advance
Two champion sales leaders share formulas for success
There are fortunes to be made in alternative lending. Getting there may require planning, persistence, and people skills in equal measure.
Roadblocks exist at every juncture of the lending process, from the introductory call, to the credit check, all the way through to the close. “Don’t celebrate until the deal is funded,” is the hue and cry of this business.
While self-help books abound on overcoming sales challenges, few address the nuances of dealing with the slings and arrows of non-bank finance.
So, what is the secret to success? DailyFunder is pleased to introduce two champion sales leaders who have fast-tracked their way to stunning success.
These are their stories.
CHAD OTAR, Excel Capital Management
Excel Capital Management, LLC, established in 2012 and based in New York City’s financial center, is a one-stop-shop for business owners in need of capital.
The company originates many types of working capital loans, including merchant cash advance, factoring, and credit card processing. Excel attributes its growth to the skills and industry knowledge of its underwriters and relationship managers.
Managing Partner Chad Otar tried a number of different jobs in the restaurant and healthcare professions after earning a bachelors degree in Psychology in 2011 from CUNY Brooklyn College.
“I was out of college and couldn’t find a career that I enjoyed,” Otar said. “I tried the restaurant business where I worked as bus boy, waiter, and then manager. I tried medical school.”
When Otar was a med student, his brother, a stockbroker, began to talk to him about an up-and-coming industry called alternative lending. After reluctantly agreeing to meet his brother’s colleague who owned a funding company, Otar began working part-time at his brother’s apartment, setting appointments and doing various pre-call activities.
“My brother had to drag me to this meeting [with the lender],” Otar said. “At the time, he was considering going into [alternative lending] and wanted to try it out. We had always worked well together. So I set the appointments, he closed the deals, and we split the commissions. I was simultaneously helping my brother and learning a trade.”
Within a first week of working together the brothers closed their first deal, netting Otar $1,000. The rest, as they say, is history.
It didn’t take long for Otar to want an expanded role in the funding process and a bigger piece of the pie. After a year of working his own UCC leads from home, Otar was offered a partner position with a cash advance company, an attractive package with salary, commission and benefits.
Working in a senior role at a leading cash advance company gave Otar a broader view of the industry, an improved tolerance for risk, and a solid foundation for his subsequent success as an entrepreneur. With one and a half years of experience as an executive manager under his belt, Otar and a partner broke away and started their own company, working out of Otar’s mother’s basement. Otar described the early days as a democratic arrangement between friends — days of closing, borrowing, and “calling, calling, calling.” A year later, the partners were funding an average of $2 million to $3 million in revenue per month.
Otar described his career as a rags-to-riches story with a real-life happy ending. He will never forget what it felt like to earn his first commission check or to find himself in his early 20s with a six-figure annual income. Most importantly, Otar, a self-described eternal optimist and four-time cancer survivor, is grateful to be alive.
After being diagnosed at 17 with testicular cancer and surviving multiple operations to become cancer free, Otar launched Campaign for Life Interrupted, promoting his cause on the talk show circuit.
In his interview with the Times Ledger newspaper in Queens, New York, Otar said that he wanted to spread hope to other young cancer patients and named the foundation “Life Interrupted” because, “When you have cancer, everything stops.”
He also shared his story in the anthology “And We Write: Surviving Cancer; Let the Healing Begin”, directing all proceeds from book sales to cancer research.
Reflecting on the extraordinary journey that brought him all the way to Wall Street, Chad credits his mother for her continuous encouragement, and for helping him become “the man I am today” – a man who is passionate about his business and deeply connected to his customers, partners, and friends.
ZACHARY RAMIREZ, Core Business Loans
Core Business Loans, established in January 2014 and based in Newport Beach, California, provides business loans and cash advance services to small and medium-sized businesses nationwide.
Core is focused on building partnerships with clients, brokers, and ISOs by providing low rates and high quality of service. Core believes in managed growth through long-term relationships that generate quality business over time.
Managing Partner Zachary Ramirez can see the John Wayne International Airport from his office window, a daily reminder of the hard work that goes into launching a new company.
Ramirez attributes his fast start in alternative lending to his background in equipment leasing and financing. Equipment lessors and cash-advance providers typically have a similar underwriting and funding process.
In fact, working capital loans and merchant cash advances are natural extensions of equipment financing, Ramirez said.
“I’ve worked in this industry for just over two years,” Ramirez said. “I started out in equipment leasing, and gravitated towards working capital and cash advances after I learned the products and the space. After working in equipment leasing, which has a difficult and rigorous funding process, working capital seemed much easier. In addition, the demand for the product is growing exponentially.”
Ramirez’s first cash advance employer gave him inbound and outbound telemarketing scripts to recite verbatim to each prospective client. After several weeks he threw the scripts away, replacing them with his own fresh techniques, which proved highly successful. A short time later he was training the company’s new recruits, and built their company into one of the largest ISOs on the West Coast in less than a year.
This type of overnight success can be both a blessing and a curse. After his highly successful stint growing his first cash advance company, Ramirez decided the time was right to start a new venture, a move that resulted in a stunning reversal of fortune and had him looking for a Plan B.
After losing the shirt off his back and hardly having two nickels to rub together, he regretfully gave up his dream and accepted a sales manager position at another established ISO.
The strategies that Ramirez used to get back on his feet became his guiding principles. He spent each night in the library during this time, perfecting and honing his already high-level sales abilities.
Brian Tracy’s book “The Psychology of Selling”, along with Neil Rackham’s book “SPIN Selling”, gave Ramirez the much-needed edge to hit the ground running again. The “Psychology of Selling” focuses on developing mental outlook, desire, and self-esteem, whereas “Spin Selling” focuses on pushing the deal to the maximum possible advance of the sale. Implementing these fresh new ideas, Ramirez managed to fund 14 units for a total of $71,387 of gross margin in just his second month at his new ISO.
After a year of similar months, Ramirez saved enough money to cover a few years worth of expenses, allowing him to again pursue his dream of building the most competitive cash advance provider in the space.
He left his ISO to join the directors’ board of Core Business Loans, serving as the VP of Sales.
Different strokes, remarkable similarities
While they couldn’t be farther apart geographically, Otar and Ramirez have much in common. They’re both in their 20s, entrepreneurial, and passionate about their profession. Both have found a way to quadruple earnings in less than three years. Both are high-energy extroverts whose primary motivation is not fortune or fame but a desire to make a difference.
Here in their words are some tips on how to make it in this business.
Maximizing Income
There are many ways to make money in alternative lending. It’s not uncommon to receive upfront commissions as soon as a deal is funded. Ancillary revenue streams from a variety of sources such as processing residuals and renewals can enhance and stabilize monthly income. DailyFunder asked the top producers for recommendations on how to make more than six figures in this business.
Otar has a counterintuitive approach to maximizing income by putting the best interests of clients, partners, and employees before his own. In his words, if you do the right thing, the money will follow.
“We don’t charge upfront fees and broker fees,” Otar said. “We do right by them and they come back. That’s why my book has a high retention rate. And we ask for [credit card] processing revenue only if it’s necessary to change their processing. It’s always a good idea to have that in your back pocket. And always try to save them something. And remember not every deal is a one-size-fits-all. You need to look for other options for your clients.”
Ramirez believes that the most important thing about making money in this industry is consistency with prospecting and maximizing every opportunity.
“In every step of the sales process, go for the maximum possible advance of the sale: whatever gets you to the next step. For example, if you’re on the first call with a client, what’s the best outcome you can get from the call? Wouldn’t it be walking through the application process on the phone? Go for it! What do you have to lose? The client saying no gets you the same result as never having asked.”
He went on to say that a truly “maxed out” deal is one that capitalizes on every opportunity: funding the deal, switching their processor over, getting a written testimonial, getting a referral, and of course, getting the RENEWAL.
Sources of Leads
There are numerous ways to get revenue in this business, from ISO partners, personal referrals, online lead aggregators, to local community banks. While Otar calls UCCs his “sweet spot,” he is also a big believer in referrals.
“Talk to your parents,” Otar said. “They know people who own businesses. Think outside the box by focusing on underserved, vertical industries. Grow your referral network by connecting with lenders with different areas of specialization such as asset-based lending, purchase orders, small SBA and receivables.”
Ramirez said his favorite leads are the deals that his “wonderful ISOs send me!”
“But really, the best lead is an unsolicited referral. The next best is a solicited referral. I’ve tried virtually every lead source, SEO, direct mail; email blast, fax blast, UCCs, aged leads, you name it,” Ramirez said. “In the end, all leads are managed with the same strategy: push each call to the furthest point to increase conversion rates, measure your metrics at each stage of the sale, and ultimately keep your CPA (cost per acquisition) as low as possible.”
Staying in the Game
There can be bad days, even bad months, in this business. DailyFunder asked Otar and Ramirez how they stay motivated and in the game.
“The summer months were always a tricky matter to me,” Otar said, “Because everybody is in summer mode, no one is looking for money, they aren’t worried, and they’re all relaxed. I deal with this by staying calm, and just continuing to do what I always do, which is to stay focused, stay connected, and keep on making calls.”
Ramirez described funding as an emotion-driven business and cautioned against becoming emotionally invested in any deal.
“Don’t get excited until it is funded,” he said. “ A good rule of thumb is to be skeptical of every deal, yet confident in your own work ethic and abilities. Over time, no single deal will make or break you.”
Ramirez said that fear of rejection and lack of self-esteem have an inverse relationship to success.
“Boost your self-esteem and you’ll increase your conversion rate. It’s that simple,” Ramirez said.
Ramirez said that typically to stay motivated he reads daily affirmations, which include quotes and messages such as, “I am the best salesman in this industry,” and “It is going to be a great day.”
“Affirmations get you pumped up and ready to hammer the phones,” Ramirez said. “I set DAILY quotas and goals for myself and my team that are measurable, such as ‘I will make 125 prospecting calls today.’ This way I can measure key performance indicators on a daily basis to ensure we are on track for monthly targets.”
Advice for the worst of times
In addition to the customary peaks and valleys of career selling, there can be hard knocks, situations that can prompt even the most experienced and successful agents to consider other, albeit less profitable, ways of making a living.
DailyFunder asked Otar and Ramirez to share how they have dealt with sales nightmares.
Otar said his “nightmare,” actually had a pretty good ending and began when he had his first monster deal.
“From the time that my client said, ‘OK and let’s do this right away’ to the day that he got funded, I don’t think I had two hours sleep,” Otar said. “Sometimes when things go too smoothly, you just feel weird inside. This was definitely one of those too-good-to-be true situations, and the four longest days of my life. When it was over, and I got paid, I did what any self-respecting broker would do. I bought a Rolex to remind me of how far I’ve advanced in my career, and how much I have to keep on pushing.”
Ramirez implied that every deal has its own little nightmare.
“Unfortunately, sales nightmares are standard-issue in this business,” Ramirez said. “Every day there are deals that randomly die in funding, go with a competitor, get funded from a family member, or any other number of circumstances.”
Ramirez said he recently had a deal die in funding that absolutely needed the money to meet their $40,000 payroll.
“The deal died in funding because the merchant could not keep their rent up-to-date. Now they’ve lost their business, and I can’t help but feel partially responsible,” Ramirez said.
Best Years Ahead
Both Otar and Ramirez are optimistic about the future and abundant opportunities in non-bank finance.
“Make sure to maximize EVERY single opportunity,” Ramirez said. “Switch their processor over. Ask them to write a testimonial for you. Get a referral or two from them. Above all, secure the renewal. If you aren’t maximizing every opportunity, you will lose in this business.”
Ramirez said to set long-term goals for yourself.
“Break those goals into yearly steps. Break those yearly steps into monthly steps. Finally break those monthly steps into DAILY ACTIONS,” Ramirez said. “Write those daily actions down (100 calls per day, three hours of talk time, two applications per day, etc) and hold yourself to those standards EVERY DAY. Once you create a daily routine and have the integrity to hold yourself to it, you will see measurable results almost immediately.”
“Just call nonstop and don’t give up!” said Otar. “Keep on making those calls. Keep on fighting!”
He added that it’s better to down-sell than to walk away from a deal.
“This is a relationship business,” he said. “Remember to leave the door open. You can always make your money the second time around.”
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